The California PUC has issued a license to Cruise (funded by GM and Honda) to provide a robotaxi service in California without a safety driver in the vehicle. Cruise is testing in San Francisco and touting the importance of thriving in this more challenging non-peri-urban environment. Waymo has yet to apply for a toll-free permit, but reports suggest Waymo and Cruise have started the process to offer paid rides. Waymo operates a paid, unsecured chauffeur service in Chandler Arizona and has been doing so for some time. He didn’t bother to apply for a free California permit, but has ramped up operations there, suggesting he hopes to do so soon.

It’s no surprise that Waymo didn’t care about a no-fee permit, given the limitations of the cruise permit, which also prohibits round-trip, airport travel, or shared rides. Cruise, on the other hand, has yet to do either public taxi service (with a security driver) and has only given a brief demonstration of a test ride with a driver. seat in the passenger seat late at night in a quiet part of town.

The test with the passengers is an important step, and you learn things like:

  1. How people react to vehicles and what they do in vehicles.
  2. User experience of ordering, managing and (optionally) invoicing.
  3. How to provide customer service from remote operators.
  4. Deal with and learn from strange customer requests like changing your mind, breaking the rules and more.
  5. The pick-up and drop-off challenge, which is also very different in suburban malls and city sidewalks.
  6. If you can charge, how people react to fees, and what fee structures work best.

Some of these companies like Uber

UBER
and Lyft

LYFT
already know well (and they’re not hard to learn.) Some Waymo’s have gained a lot of experience, but they haven’t yet faced complicated city sidewalks for pickup / drop-off, something even drivers do taxi humans have problems with.

Cruise said their real plan was their shared “Origin” vehicle, but they can’t test ridesharing. San Francisco is finally preparing to be far enough beyond Covid to cause the return of carpooling, and it is a shame to slow down more experiments in this area as well.

Waymo has so far made only modest pricing experiments. Their fares in Chandler are a modest reduction from Uber fares. It is not clear that this affects the number of people who use the service there. Uber-style riding is much more common in San Francisco than in Chandler. Waymo recently added the ability to do a multi-leg trip (including, of course, round trips) by pausing your trip, without having to pay the “flag” fee for the extra legs, by simply adding more miles.

Typical taxi fares will include a basic “flag drop” fee (a reference to flags on taxi counters) plus a per mile charge and sometimes a minute of inactivity charge for being stopped. There may also be minimum charges, which in Uber’s case are often around $ 7, making short trips uneconomical. Flag-dropping pays for a variety of things, including the hours drivers have sat or driven while waiting for passengers, and the distance traveled to pick up a passenger. Robotaxis allows you to experience this. There is no human who has to be paid to “wait”, just the least cost to keep a vehicle idling. The costs will largely be per mile, but something has to pay for the trip to pick up a customer from the last drop off, and any predictive repositioning to speed up pickups.

Lots of interesting experiments to be done with the robotic axis go way beyond that. Customers may prefer flat fees or monthly subscription fees to costs per mile. Uber and Lyft have played with subscription services. Owning a regular car is not considered a cost per mile – for many owners this involves a monthly rental and insurance payment, maintenance payments 1-2 times a year, and visits weekly at a gas station (or monthly utility bills.) Plus parking and garage of course, something taxi users don’t worry about. The method of payment for the taxi is foreign to the owner of the car.

Waymo has even more to learn about driving in San Francisco, as does Cruise. They both have to find out about crowded sidewalks during rush hour. But a lot of interesting learning involves payment. It is not at all clear why the California PUC wants to ban billing and how it fulfills its role of protecting the public by doing so. These services will both start small, so they will not affect public markets for rides (yet), although their long-term goal is to compete with them. Hopefully they are quick to reverse this policy.



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